Legal Advice for Purchase Lease Options

This blog is all about Legal Advice for Purchase Lease Options. Now, of course, I can’t actually give you legal advice because I’m not a solicitor. But what I can do is educate you around some of the legal advice topics involved with Purchase Lease Option Agreements.

Are PLOs Legal?

Now the first question people ask me is, “Are Options legal?“. Yes, they absolutely are legal. They’ve been used in English law for many years. The law society in Scotland doesn’t like Purchase Lease Options so you can’t do Options there. Instead we do something called an exchange with a delayed completion. It’s similar to an Option, but with an Option, you have the right to buy but not the obligation to.

When you do an Exchange Delay Completion (EDC), you are committing to buy the property. So only do those if you’re definitely going to buy. Make sure you’ve got your finance lined up. There are a few places around the world where PLOs are not accepted. Such as parts of Australia as well as a couple of states in America. But generally, this strategy works everywhere in the world.

Amateur investors come to me and say, “Simon, can I have the legal paperwork for a PLO?”. It’s very important when you do a Purchase Lease Option that you get a solicitor to do the legal paperwork and contract for you. This is going to be a valuable property deal for you. You can get cash flow and potential equity growth from a property without a mortgage, that you don’t own. That means you don’t have to put in a big 25% deposit.

So it’s worth spending a bit of money with a solicitor to get the right kind of Purchase Lease Option Contract. Be aware, many solicitors don’t actually know what a Purchase Lease Option is, let alone know how to put a contract together. An Option Agreement should cost between £600 to £1,000 depending what kind of solicitor is used, to do it.

“It’s very important when you do a Purchase Lease Option that you get a solicitor to do the legal contract for you.”

So it’s worth spending a bit of money with a solicitor to get the right kind of Purchase Lease Option Contracts. This is a slight challenge as many solicitors don’t actually know what a Purchase Lease Option is, let alone know how to put a contract together. If you went to them they’ll either say, “Well I’ve never heard of that, I don’t think you can do it.” Or, if they’re a bit more open minded and say, “Well okay, I don’t know that, but I can do it for you.It’s going to cost you four grand”.

This is because they’ve got to learn how to do it. An Option Agreement should cost anywhere between £600 maybe up to about £1000 depending what kind of solicitor is used, to do it.

Putting Together the Head Of Terms

Major Legal Advice for Purchase Lease Options is to use your solicitor to do the paperwork for you. In order for the solicitors to prepare the paperwork you will need to put together a Heads of Terms for them. HOTs are the details of the deal you have agreed with the owner of the property. It’s so simple, you could literally write it on a piece of paper.

Here is what you need to include on The Heads of Terms:

  • Your name and address
  • The owners name and address
  • The address of the property on which you’re doing the Option
  • The agreed purchase price
  • The length of the Option term
  • The Option fee you’re paying them
  • Any monthly options fees to be able to use the property
  • Any special conditions.

If you want to change the kitchen in the house for example, it’s much better that you agree that up front. This is rather than trying to do it two years down the line. Where you might not get hold of the owner. Your solicitor can get a power of attorney for you if you want to exercise the Option. They’ll make sure that if you want to have a restriction on Land Registry, you can do that, so the owner can’t refinance or sell the property, because you’ve got the option to control it. So your solicitor takes care of all those things. You don’t need to do it as long as you use the correct solicitors.

It’s also very, very important to make sure the seller has independent, legal representation. We want to make sure they are fully aware of what they’re agreeing to. We’re not trying to trick or con anyone. We want to find someone for whom a Purchase Lease Option is a great solution for. This is whilst also being a great solution for us.

If the seller gets independent advice the solicitor will say, “Look, do you realise you’re signing something here that says that it might be worth £200,000 now, but they can buy at any time in the next five years, and it might be worth substantially more, but you’re only going to get the £200,000 you agreed.”

They’ll then sign and say, “Yes, I understand this.” The reason the owner is willing to do this is because they don’t want the hassle of the property anymore. They want to get away from the liability. They’re happy for you to come in and take it over. You’re happy to take it over because you get cash flow on the property in the meantime. Then you can buy the property in the future, if you want to or you can walk away. Remember, you’ve got the right to buy, but not the obligation to do so.

“Don’t expect the solicitors to talk together and agree the deal. You need to present them with the Heads of Terms that says exactly what the deal is.”

In Summary

So when it comes down to Legal Advice for Purchase Lease Options, there are a couple of things you need to be aware of. First of all, you don’t want to be doing the paperwork yourself. Get a solicitor to do that for you. You need to make sure that your solicitor and the sellers solicitor know what they’re doing and understand Purchase Lease Options. Get a recommendation from other investors who are doing this strategy. This can perhaps be from a local network meeting. Find out who they use.

In order for the solicitors to prepare the paperwork you will need to put together a Heads of Terms for them. This is a basic agreement saying exactly what the deal is. It’s so simple, you could just literally write it on a piece of paper. It’s your name and address; their name and address; The address of the property on which you’re doing the Option; the agreed purchase price; The length of the Option term and The Option fee you’re paying them. You can also add any monthly options fees to be able to use the property and any special conditions too. Don’t expect the solicitors to talk together and agree the deal. You need to present them with the heads of terms that says exactly what the deal is.

Purchase Lease Options is one of my favourite strategies and I think it’s a great strategy to use right now. Be aware, they don’t work in every circumstance. They only really work if the seller doesn’t need the money from the sale now. If they need the money now, then Options are not going to work for them. So only use Options when they are appropriate. But when they do work, when they’re appropriate, they can be an incredibly powerful strategy. They offer a true, genuine, win-win solution for everyone involved.

Join the UK’s Leading Property Investment Community

Want to stay ahead in the world of property investing? Get expert insights, tips, and updates delivered straight to your inbox. Be part of a thriving network of investors and take action towards your goals today!




The Biggest Property Investing Mistake That Could Cost You Millions
The Biggest Property Investing Mistake That Could Cost You Millions

Over the past three decades, I’ve seen thousands of people start their property journey. Many of them share the same challenges, and most fall into the same traps. One of the most common property investing mistakes is looking only at the price of a property, without...

The Biggest Opportunity in the UK Property Market in the Last 30 Years
The Biggest Opportunity in the UK Property Market in the Last 30 Years

Right now, we are facing some of the most exciting UK property market opportunities 2025 has to offer, in fact, they may be the biggest I’ve seen in my 30 years of investing. Yet, despite the scale of this opportunity, most investors are going to completely miss it....

Property Market Crash: How to Profit When Others Lose
Property Market Crash: How to Profit When Others Lose

If you’ve been following the news lately, you’ve probably seen headlines warning about falling house prices, rising interest rates, and predictions of a looming UK property market crash. For many, that sounds like bad news. If you’re an investor or thinking of...

UK Housing Market 2025: What You’re Not Being Told
UK Housing Market 2025: What You’re Not Being Told

If you’ve been watching the news, scrolling through social media, or chatting with friends, you’ve probably heard the big question: “Is the UK housing market about to crash in 2025?” For some, the idea sparks panic. For others, it signals opportunity. In this blog,...

Why Property Investors Fail: 4 Mistakes That Cost Beginners in the UK
Why Property Investors Fail: 4 Mistakes That Cost Beginners in the UK

Property investing is one of the most powerful ways to build long-term wealth but many beginners still fail before they ever complete a deal. And no, it's not because of interest rates or house prices. After mentoring thousands of UK investors over the last two...

Should You Buy a Property That’s Vacant or Tenanted?
Should You Buy a Property That’s Vacant or Tenanted?

If you're looking to buy an investment property, you may come across listings described as “sold with a tenant in situ” or “vacant possession upon completion.” On the surface, buying a tenanted property might seem like a no-brainer. After all, there’s already a tenant...

Why Rent Caps Could Destroy the UK Rental Market
Why Rent Caps Could Destroy the UK Rental Market

If you’re a landlord or thinking about becoming one, there’s something important you need to know: Rent caps don’t work. They might sound good in theory. The government introduces a cap on rent increases, tenants save money, and everyone’s happy... right? Not quite....

Why Your Home Might Be a Liability (And What to Do About It)
Why Your Home Might Be a Liability (And What to Do About It)

Most people grow up believing that buying your own home is the smartest financial decision you can make. It feels like a rite of passage. A sign of success. But what if I told you that your home might not be the asset you think it is? In fact, in many cases, your home...